Bangladesh’s money supply and credit growth slowed in July, even as digital transactions—from mobile wallets to internet banking—continued to surge, according to the central bank’s latest data.
Bangladesh Bank’s Monthly Economic Trends (September 2025) shows the broad money supply (M2) contracted 0.31% in July from June, though year-on-year it rose 6.99%, supported by higher domestic and foreign assets.
Broad money, known as M2, measures the total volume of currency in circulation plus demand deposits and time deposits in banks – making it a key gauge of liquidity available to households, businesses, and the government.
Domestic credit rose 0.36% in July, down from 1.08% the previous month. On an annual basis, credit expanded 7.96%, well short of last year’s double-digit pace.
The details highlight a widening gap: private-sector lending grew only 6.52%, compared with 10% a year ago, while net government borrowing jumped 14.51%, reflecting fiscal reliance on banks to cover budget shortfalls.
Liquidity indicators remained tight. Reserve money fell 3.42% month-on-month, while the call-money rate for overnight loans averaged close to 10% in August, more than a percentage point higher than last year.
While credit creation sputters, digital finance is booming. Cheque clearing volumes fell 13% year-on-year in July to Tk 1,58,049 crore, underscoring the steady decline of paper instruments. In contrast, electronic fund transfers rose 18% year-on-year to Tk 87,812 crore, marking a clear migration to digital settlement.
Card usage expanded as well. Credit card spending hit Tk 3,509 crore in July, up 32% from a year earlier, though slightly down from June. Point-of-sale transactions rose nearly 8% month-on-month, while e-commerce payments slid more than 14%, signalling a tilt back to in-store shopping. Debit cards, with far higher volumes, logged Tk 43,804 crore in transactions, up 17% year-on-year.
Internet banking stood out as the fastest-growing channel. Transaction volumes surged 37% from a year earlier to Tk 1,13,470 crore in July, reflecting rising adoption by households and businesses. Mobile financial services remained the country’s dominant retail payment rail, processing Tk 1,48,567 crore, up 21% year-on-year. Agent banking, once central to rural inclusion, slowed sharply with just 1% growth over the same period at Tk 65,403 crore.
Households are also funnelling more into safe assets. Investments in National Savings Schemes soared 61% year-on-year to Tk 7,916 crore in July, reflecting the appeal of guaranteed returns as inflation, though easing, stays above comfort levels.
“Bangladesh’s financial system is tightening on credit but expanding fast in digital,” said economist M S Siddique. “The challenge is to turn this digital surge into sustainable revenue without choking private investment.
